Attached files
| file | filename |
|---|---|
| 8-K - 8-K - Worldpay, Inc. | a12-16406_28k.htm |
Exhibit 99.1
Vantiv Reports Second Quarter 2012 Results
21% Transaction Growth
20% Net Revenue Growth
Increasing Guidance
Cincinnati, Ohio, July 23, 2012 — Vantiv, Inc. (NYSE: VNTV) (Vantiv or “the Company”) today announced financial results for the second quarter ended June 30, 2012. Revenue increased 17% to $469.6 million as compared to $402.6 million in the prior year. Net revenue increased 20% to $260.4 million as compared to $216.9 million in the prior year. Cash net income increased 48% to $68.0 million as compared to $46.0 million in the prior year. Adjusted cash net income per share was $0.32. (See Schedule 2 for cash net income and Schedules 6 and 7 for GAAP net income reconciliation to cash net income.)
On a GAAP basis, net income attributable to Vantiv, Inc. was $23.0 million, or $0.18 per diluted share, compared with net income of $5.4 million, or $0.06 per diluted share, in the prior year. GAAP net income in the prior year included $13.8 million of costs related to charges incurred in connection with refinancing of indebtedness, or $0.13 loss on a diluted per share basis.
Transactions increased 21% and net revenue increased 20% primarily driven by a 29% increase in transactions in the Merchant Services segment. Adjusted EBITDA increased 20% to $131.0 million as compared to $109.5 million in the prior year. (See Schedule 8 for reconciliation from GAAP income from operations to adjusted EBITDA.)
“Our second quarter results reflect outstanding performance across our business,” president and chief executive officer Charles Drucker said. “Vantiv employees continue to execute on our new sales and channel initiatives to drive growth in net revenue and profitability.”
Merchant Services
Net revenue increased 26% to $176.9 million as compared to $140.2 million in the prior year, primarily due to a 29% increase in transactions. Organic growth and new business contributed to strong transaction growth for the quarter. Net revenue per transaction declined by 5% as compared to the first quarter, as anticipated, primarily due to the impact of a new large national merchant processing contract. Sales and marketing expenses increased 21% to $63.6 million as compared to $52.6 million in the prior year in line with the growth in net revenue.
Financial Institution Services
Net revenue increased 9% to $83.4 million as compared to $76.7 million in the prior year driven primarily by growth in value added services revenue. Sales and marketing expenses increased by 4%.
2012 Financial Outlook
“Based on strong business results for the first half of 2012 we are raising our guidance for the year,” said Mark Heimbouch, chief financial officer. “Net revenue for 2012 is now expected to be between $1.0 billion and $1.02 billion, representing a year-over-year increase of 16% to 18% versus our previous estimate of $0.995 billion to $1.01 billion. Cash net income is now expected to be between $243.0 million and $252.0 million, representing annual growth between 32% and 37%, versus our previous estimate of $234.0 million to $242.0 million. Adjusted cash net income per share is now expected to be between $1.13 and $1.17 versus our previous
estimate of $1.09 to $1.13. GAAP net income per share is expected to remain between $0.42 and $0.46 on a diluted per share basis.”
Earnings Conference Call and Audio Webcast
The Company will host a conference call to discuss second quarter 2012 financial results today at 5:00 PM ET. Hosting the call will be Charles Drucker, president and chief executive officer and Mark Heimbouch, chief financial officer. The conference call can be accessed live over the phone by dialing (877) 941-1427, or for international callers (480) 629-9664. A replay will be available approximately two hours after the call concludes and can be accessed by dialing (877) 870-5176, or for international callers (858) 384-5517, and entering the conference ID 4551504. The replay will be available through Monday, July 30, 2012. The call will be webcast live from the Company’s investor relations website at http://investors.vantiv.com.
About Vantiv, Inc.
Vantiv, Inc. (NYSE: VNTV) is a leading, integrated payment processor differentiated by a single, proprietary technology platform. Vantiv offers a comprehensive suite of traditional and innovative payment processing and technology solutions to merchants and financial institutions of all sizes in the U.S., enabling them to address their payment processing needs through a single provider. We build strong relationships with our customers, helping them become more efficient, more secure and more successful. Vantiv is the third largest merchant acquirer and the largest PIN debit acquirer based on number of transactions in the U.S. The company’s growth strategy includes expanding further into high growth payment segments, such as ecommerce, mobile, prepaid and information solutions, and attractive industry verticals, such as business-to-business, government, healthcare and education. For more information, visit www.vantiv.com.
Non-GAAP Financial Measures
This earnings release presents non-GAAP financial information including net revenue, EBITDA, adjusted EBITDA, cash net income, and adjusted cash net income per share information. These are important financial performance measures for the Company, but are not financial measures as defined by GAAP. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The Company uses these non-GAAP financial measures for financial and operational decision making and as a means to evaluate period-to-period comparisons. The Company believes that they provide useful information about operating results, enhance the overall understanding of past financial performance and future prospects, and allow for greater transparency with respect to key metrics used by management in its financial and operational decision making. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented in the attached schedules.
Net revenue is revenue, less network fees and other costs. Cash net income includes adjustments to exclude amortization of intangible assets acquired in business combinations, primarily customer related intangible assets, share-based compensation, transition costs associated with our separation from Fifth Third Bank, integration costs incurred in connection with acquisitions and conversion of non-controlling interests into shares of Class A common stock. For purposes of providing better comparability we also made adjustments to interest expense and depreciation in 2011. (See Schedule 6 for a reconciliation from GAAP net income to cash net income.)
Forward-Looking Statements
This release contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact or relating to present facts or current conditions included in this release are forward-looking statements including any statements regarding guidance and statements of a general economic or industry specific nature. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, guidance, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “should,” “can have,” “likely” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events.
The forward-looking statements contained in this release are based on assumptions that we have made in light of our industry experience and our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. As you review and consider this presentation, you should understand that these statements are not guarantees of future performance or results. They depend upon future events and are subject to risks, uncertainties (many of which are beyond our control) and assumptions. Although we believe that these forward-looking statements are based on reasonable assumptions, you should be aware that many factors could affect our actual future performance or results and cause them to differ materially from those anticipated in the forward-looking statements. Certain of these factors and other risk factors are discussed in the Company’s filings with the U.S. Securities and Exchange Commission and include, but are not limited to: (i) the ability to keep pace with rapid developments and change in our industry and provide new services to our clients; (ii) competition within our industry; (iii) disclosure of unauthorized data and security breaches that expose us to liability, litigation and reputational damage; (iv) failures of our systems or systems of our third party providers; (v) our inability to expand our market share in existing markets or expand into new markets; (vi) our ability to identify acquisition, joint venture and partnership candidates and finance or integrate businesses, services or technologies that we acquire; (vii) failure to comply with applicable requirements of Visa, MasterCard or other payment networks; (viii) changes in payment network rules or standards; (ix) our ability to pass fee increases along to merchants; (x) termination of sponsorship or clearing services provided to us; (xi) increased attrition of our merchants, independent sales organizations, or ISOs, or referral partners; (xii) inability to successfully renew or renegotiate agreements with our clients or ISOs; (xiii) reductions in overall consumer, business and government spending; (xiv) fraud by merchants or others; (xv) a decline in the use of credit, debit or prepaid cards; (xvi) consolidation in the banking and retail industries; and (xvii) the effects of governmental regulation, changes in laws and outcomes of future litigation or investigations. Should one or more of these risks or uncertainties materialize, or should any of these assumptions prove incorrect, our actual results may vary in material respects from those projected in these forward-looking statements.
Any forward-looking statement made by us in this release speaks only as of the date on which we make it. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Contacts
Don Duffy/Dara Dierks
866-254-4811 or 513-900-4811
IR@vantiv.com
Schedule 1
Vantiv, Inc.
Consolidated Statements of Income
(in thousands, except share data)
(Unaudited)
|
|
|
Three months ended |
|
|
|
Six months ended |
|
|
| ||||||||
|
|
|
June 30, |
|
June 30, |
|
|
|
June 30, |
|
June 30, |
|
|
| ||||
|
|
|
2012 |
|
2011 |
|
% Change |
|
2012 |
|
2011 |
|
% Change |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Revenue |
|
$ |
469,622 |
|
$ |
402,564 |
|
17 |
% |
$ |
902,411 |
|
$ |
774,010 |
|
17 |
% |
|
Network fees and other costs |
|
209,244 |
|
185,694 |
|
13 |
% |
409,452 |
|
367,910 |
|
11 |
% | ||||
|
Net revenue |
|
260,378 |
|
216,870 |
|
20 |
% |
492,959 |
|
406,100 |
|
21 |
% | ||||
|
Sales and marketing |
|
70,532 |
|
59,570 |
|
18 |
% |
143,289 |
|
115,789 |
|
24 |
% | ||||
|
Other operating costs |
|
40,417 |
|
34,980 |
|
16 |
% |
79,426 |
|
72,720 |
|
9 |
% | ||||
|
General and administrative |
|
29,190 |
|
28,224 |
|
3 |
% |
57,787 |
|
49,607 |
|
16 |
% | ||||
|
Depreciation and amortization |
|
39,667 |
|
39,001 |
|
2 |
% |
78,562 |
|
75,701 |
|
4 |
% | ||||
|
Income from operations |
|
80,572 |
|
55,095 |
|
46 |
% |
133,895 |
|
92,283 |
|
45 |
% | ||||
|
Interest expense—net |
|
(10,169 |
) |
(28,952 |
) |
-65 |
% |
(34,619 |
) |
(59,573 |
) |
-42 |
% | ||||
|
Non-operating expenses(1) |
|
(836 |
) |
(13,799 |
) |
-94 |
% |
(92,672 |
) |
(13,799 |
) |
NM |
| ||||
|
Income before applicable income taxes |
|
69,567 |
|
12,344 |
|
NM |
|
6,604 |
|
18,911 |
|
-65 |
% | ||||
|
Income tax expense |
|
21,989 |
|
683 |
|
NM |
|
1,954 |
|
2,551 |
|
-23 |
% | ||||
|
Net income |
|
47,578 |
|
11,661 |
|
NM |
|
4,650 |
|
16,360 |
|
-72 |
% | ||||
|
Less: Net income attributable to noncontrolling interests |
|
(24,622 |
) |
(6,281 |
) |
NM |
|
(58 |
) |
(7,481 |
) |
-99 |
% | ||||
|
Net income attributable to Vantiv, Inc. |
|
$ |
22,956 |
|
$ |
5,380 |
|
NM |
|
$ |
4,592 |
|
$ |
8,879 |
|
-48 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Net income per share of Class A common stock attributable to Vantiv, Inc.: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
$ |
0.19 |
|
$ |
0.06 |
|
|
|
$ |
0.04 |
|
$ |
0.10 |
|
|
|
|
Diluted |
|
$ |
0.18 |
|
$ |
0.06 |
|
|
|
$ |
0.03 |
|
$ |
0.10 |
|
|
|
|
Shares used in computing net income per common share: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Basic |
|
122,777,349 |
|
89,515,617 |
|
|
|
107,897,927 |
|
89,515,617 |
|
|
| ||||
|
Diluted |
|
130,093,491 |
|
89,515,617 |
|
|
|
160,053,473 |
|
89,515,617 |
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Non Financial Data: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Transactions (in millions) |
|
3,895 |
|
3,222 |
|
21 |
% |
7,263 |
|
6,224 |
|
17 |
% | ||||
(1) Non-operating expenses primarily consist of charges incurred with the refinancing of our debt in March 2012 and May 2011 and the termination of our interest rate swaps in March 2012.
Schedule 2
Vantiv, Inc.
Cash Net Income (Non-GAAP)
(in thousands, except share data)
(Unaudited)
See schedule 6 and 7 for a reconciliation of GAAP net income to cash net income.
|
|
|
Three months ended |
|
|
|
Six months ended |
|
|
| ||||||||
|
|
|
June 30, |
|
June 30, |
|
|
|
June 30, |
|
June 30, |
|
|
| ||||
|
|
|
2012 |
|
2011 |
|
% Change |
|
2012 |
|
2011 |
|
% Change |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Revenue |
|
$ |
469,622 |
|
$ |
402,564 |
|
17 |
% |
$ |
902,411 |
|
$ |
774,010 |
|
17 |
% |
|
Network fees and other costs |
|
209,244 |
|
185,694 |
|
13 |
% |
409,452 |
|
367,910 |
|
11 |
% | ||||
|
Net revenue |
|
260,378 |
|
216,870 |
|
20 |
% |
492,959 |
|
406,100 |
|
21 |
% | ||||
|
Sales and marketing |
|
70,532 |
|
59,570 |
|
18 |
% |
143,289 |
|
115,789 |
|
24 |
% | ||||
|
Other operating costs |
|
39,070 |
|
31,539 |
|
24 |
% |
77,627 |
|
63,039 |
|
23 |
% | ||||
|
General and administrative |
|
19,728 |
|
16,276 |
|
21 |
% |
38,055 |
|
30,266 |
|
26 |
% | ||||
|
Adjusted EBITDA(1) |
|
131,048 |
|
109,485 |
|
20 |
% |
233,988 |
|
197,006 |
|
19 |
% | ||||
|
Depreciation and amortization |
|
10,381 |
|
8,094 |
|
28 |
% |
19,987 |
|
16,187 |
|
23 |
% | ||||
|
Adjusted income from operations |
|
120,667 |
|
101,391 |
|
19 |
% |
214,001 |
|
180,819 |
|
18 |
% | ||||
|
Interest expense—net |
|
(10,169 |
) |
(26,625 |
) |
-62 |
% |
(34,619 |
) |
(53,250 |
) |
-35 |
% | ||||
|
Adjusted income before applicable income taxes |
|
110,498 |
|
74,766 |
|
48 |
% |
179,382 |
|
127,569 |
|
41 |
% | ||||
|
Income tax expense (at an effective tax rate of 38.5%)(2) |
|
42,542 |
|
28,784 |
|
48 |
% |
69,062 |
|
49,114 |
|
41 |
% | ||||
|
Cash net income(3) |
|
$ |
67,956 |
|
$ |
45,982 |
|
48 |
% |
$ |
110,320 |
|
$ |
78,455 |
|
41 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Adjusted cash net income per share(4) |
|
$ |
0.32 |
|
|
|
|
|
$ |
0.52 |
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Adjusted shares outstanding(5) |
|
214,012,627 |
|
|
|
|
|
213,158,581 |
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Non Financial Data: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Transactions (in millions) |
|
3,895 |
|
3,222 |
|
21 |
% |
7,263 |
|
6,224 |
|
17 |
% | ||||
Non-GAAP Financial Measures
This schedule presents net revenue, adjusted EBITDA, cash net income, and adjusted cash net income per share information. These are important financial performance measures for the company, but are not financial measures as defined by GAAP. Such financial measures should not be considered as alternatives to GAAP net income, and such measures may not be comparable to those reported by other companies.
Cash net income is derived from GAAP net income, adjusting for the following items: (a) amortization of intangible assets acquired in business combinations, primarily customer related intangible assets; (b) non-operating expenses primarily associated with the refinancing of our debt and the termination of our interest rate swaps in March 2012 and May 2011; (c) adjustments to income tax expense assuming conversion of non-controlling interests into shares of Class A common stock; (d) share-based compensation; and (e) costs associated with our separation from Fifth Third Bank and acquisition and integration costs in connection with our acquisitions in 2010. For purposes of providing better comparability, we also make adjustments in 2011 to reflect depreciation and amortization assuming that our property and equipment at December 31, 2011 was in place on January 1, 2011 and for interest expense assuming the Company’s level of debt and applicable terms as of December 31, 2011 was outstanding on January 1, 2011.
(1) See schedule 8 for a reconciliation of GAAP income from operations to adjusted EBITDA.
(2) Represents adjustments to income tax expense assuming conversion of non-controlling interests into shares of Class A common stock.
(3) Cash net income assumes the conversion of non-controlling interests into shares of Class A common stock.
(4) Cash net income per share is calculated as cash net income divided by adjusted shares outstanding.
(5) Shares for the six months ended June 30, 2012 are pro forma and weighted assuming the equity structure in place March 31, 2012, was in place January 1, 2012. The adjusted shares outstanding include 83,919,136 Class B units that are excluded from the GAAP dilutive income per share calculation.
Schedule 3
Vantiv, Inc.
Segment Information
(in thousands)
(Unaudited)
|
|
|
Three months ended June 30, 2012 |
| |||||||||
|
|
|
|
|
Financial Institution |
|
General |
|
|
| |||
|
|
|
Merchant Services |
|
Services |
|
Corporate/Other |
|
Total |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Total revenue |
|
$ |
351,828 |
|
$ |
117,794 |
|
— |
|
$ |
469,622 |
|
|
Network fees and other costs |
|
174,889 |
|
34,355 |
|
— |
|
209,244 |
| |||
|
Net revenue |
|
176,939 |
|
83,439 |
|
— |
|
260,378 |
| |||
|
Sales and marketing |
|
63,649 |
|
6,883 |
|
— |
|
70,532 |
| |||
|
Segment profit |
|
$ |
113,290 |
|
$ |
76,556 |
|
— |
|
$ |
189,846 |
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Non-financial data: |
|
|
|
|
|
|
|
|
| |||
|
Transactions (in millions) |
|
3,021 |
|
874 |
|
|
|
3,895 |
| |||
|
Net revenue per transaction |
|
$ |
0.0586 |
|
$ |
0.0955 |
|
|
|
$ |
0.0668 |
|
|
|
|
Three months ended June 30, 2011 |
| ||||||||||
|
|
|
|
|
Financial Institution |
|
General |
|
|
| ||||
|
|
|
Merchant Services |
|
Services |
|
Corporate/Other |
|
Total |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total revenue |
|
$ |
291,735 |
|
$ |
110,829 |
|
— |
|
$ |
402,564 |
| |
|
Network fees and other costs |
|
151,573 |
|
34,121 |
|
— |
|
185,694 |
| ||||
|
Net revenue |
|
140,162 |
|
76,708 |
|
— |
|
216,870 |
| ||||
|
Sales and marketing |
|
52,628 |
|
6,601 |
|
341 |
|
59,570 |
| ||||
|
Segment profit |
|
$ |
87,534 |
|
$ |
70,107 |
|
$ |
(341 |
) |
$ |
157,300 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Non-financial data: |
|
|
|
|
|
|
|
|
| ||||
|
Transactions (in millions) |
|
2,338 |
|
884 |
|
|
|
3,222 |
| ||||
|
Net revenue per transaction |
|
$ |
0.0599 |
|
$ |
0.0868 |
|
|
|
$ |
0.0673 |
| |
|
|
|
Six months ended June 30, 2012 |
| |||||||||
|
|
|
|
|
Financial Institution |
|
General |
|
|
| |||
|
|
|
Merchant Services |
|
Services |
|
Corporate/Other |
|
Total |
| |||
|
|
|
|
|
|
|
|
|
|
| |||
|
Total revenue |
|
$ |
674,806 |
|
$ |
227,605 |
|
— |
|
$ |
902,411 |
|
|
Network fees and other costs |
|
340,415 |
|
69,037 |
|
— |
|
409,452 |
| |||
|
Net revenue |
|
334,391 |
|
158,568 |
|
— |
|
492,959 |
| |||
|
Sales and marketing |
|
130,348 |
|
12,941 |
|
— |
|
143,289 |
| |||
|
Segment profit |
|
$ |
204,043 |
|
$ |
145,627 |
|
— |
|
$ |
349,670 |
|
|
|
|
|
|
|
|
|
|
|
| |||
|
Non-financial data: |
|
|
|
|
|
|
|
|
| |||
|
Transactions (in millions) |
|
5,566 |
|
1,697 |
|
|
|
7,263 |
| |||
|
Net revenue per transaction |
|
$ |
0.0601 |
|
$ |
0.0934 |
|
|
|
$ |
0.0679 |
|
|
|
|
Six months ended June 30, 2011 |
| ||||||||||
|
|
|
|
|
Financial Institution |
|
General |
|
|
| ||||
|
|
|
Merchant Services |
|
Services |
|
Corporate/Other |
|
Total |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
|
Total revenue |
|
$ |
554,421 |
|
$ |
219,589 |
|
— |
|
$ |
774,010 |
| |
|
Network fees and other costs |
|
298,484 |
|
69,426 |
|
— |
|
367,910 |
| ||||
|
Net revenue |
|
255,937 |
|
150,163 |
|
— |
|
406,100 |
| ||||
|
Sales and marketing |
|
101,515 |
|
13,311 |
|
963 |
|
115,789 |
| ||||
|
Segment profit |
|
$ |
154,422 |
|
$ |
136,852 |
|
$ |
(963 |
) |
$ |
290,311 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Non-financial data: |
|
|
|
|
|
|
|
|
| ||||
|
Transactions (in millions) |
|
4,522 |
|
1,702 |
|
|
|
6,224 |
| ||||
|
Net revenue per transaction |
|
$ |
0.0566 |
|
$ |
0.0882 |
|
|
|
$ |
0.0653 |
| |
Schedule 4
Vantiv, Inc.
Condensed Consolidated Statements of Financial Position
(in thousands)
(Unaudited)
|
|
|
June 30, |
|
December 31, |
| ||
|
|
|
2012 |
|
2011 |
| ||
|
Assets |
|
|
|
|
| ||
|
Current assets: |
|
|
|
|
| ||
|
Cash and cash equivalents |
|
$ |
308,823 |
|
$ |
370,549 |
|
|
Accounts receivable — net |
|
359,282 |
|
368,658 |
| ||
|
Related party receivable |
|
4,887 |
|
4,361 |
| ||
|
Settlement assets |
|
118,300 |
|
46,840 |
| ||
|
Prepaid expenses |
|
11,783 |
|
8,642 |
| ||
|
Other |
|
34,319 |
|
20,947 |
| ||
|
Total current assets |
|
837,394 |
|
819,997 |
| ||
|
|
|
|
|
|
| ||
|
Customer incentives |
|
18,684 |
|
17,493 |
| ||
|
Property and equipment — net |
|
157,704 |
|
152,310 |
| ||
|
Intangible assets — net |
|
862,234 |
|
916,198 |
| ||
|
Goodwill |
|
1,532,374 |
|
1,532,374 |
| ||
|
Deferred taxes |
|
12,292 |
|
4,292 |
| ||
|
Other assets |
|
24,950 |
|
47,046 |
| ||
|
Total assets |
|
$ |
3,445,632 |
|
$ |
3,489,710 |
|
|
|
|
|
|
|
| ||
|
Liabilities and equity |
|
|
|
|
| ||
|
Current liabilities: |
|
|
|
|
| ||
|
Accounts payable and accrued expenses |
|
$ |
187,618 |
|
$ |
193,706 |
|
|
Related party payable |
|
760 |
|
3,814 |
| ||
|
Settlement obligations |
|
275,078 |
|
208,669 |
| ||
|
Current portion of note payable |
|
52,500 |
|
16,211 |
| ||
|
Deferred income |
|
10,886 |
|
7,313 |
| ||
|
Current maturities of capital lease obligations |
|
4,274 |
|
4,607 |
| ||
|
Other |
|
2,087 |
|
6,400 |
| ||
|
Total current liabilities |
|
533,203 |
|
440,720 |
| ||
|
Long-term liabilities: |
|
|
|
|
| ||
|
Note payable |
|
1,189,355 |
|
1,738,498 |
| ||
|
Tax receivable agreement obligations |
|
333,000 |
|
— |
| ||
|
Capital lease obligations |
|
9,985 |
|
12,322 |
| ||
|
Deferred taxes |
|
9,263 |
|
9,263 |
| ||
|
Other |
|
891 |
|
33,187 |
| ||
|
Total long-term liabilities |
|
1,542,494 |
|
1,793,270 |
| ||
|
Total liabilities |
|
2,075,697 |
|
2,233,990 |
| ||
|
|
|
|
|
|
| ||
|
Commitments and contingencies |
|
|
|
|
| ||
|
Equity: |
|
|
|
|
| ||
|
Total equity (1) |
|
1,369,935 |
|
1,255,720 |
| ||
|
Total liabilities and equity |
|
$ |
3,445,632 |
|
$ |
3,489,710 |
|
(1) Includes equity attributable to non-controlling interests.
Schedule 5
Vantiv, Inc.
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
|
|
|
Six months ended |
| ||||
|
|
|
June 30, |
|
June 30, |
| ||
|
|
|
2012 |
|
2011 |
| ||
|
Operating Activities: |
|
|
|
|
| ||
|
Net income |
|
$ |
4,650 |
|
$ |
16,360 |
|
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
| ||
|
Depreciation and amortization expense |
|
78,562 |
|
75,701 |
| ||
|
Loss on derivative assets |
|
— |
|
100 |
| ||
|
Amortization of customer incentives |
|
2,898 |
|
1,648 |
| ||
|
Amortization and write-off of debt issuance costs |
|
57,406 |
|
14,726 |
| ||
|
Share-based compensation expense |
|
17,492 |
|
1,393 |
| ||
|
Other non-cash items |
|
— |
|
662 |
| ||
|
Change in operating assets and liabilities: |
|
|
|
|
| ||
|
Decrease in accounts receivable and related party receivable |
|
8,850 |
|
28,162 |
| ||
|
Decrease in net settlement assets and obligations |
|
(5,051 |
) |
(45,720 |
) | ||
|
Increase in customer incentives |
|
(4,089 |
) |
(7,249 |
) | ||
|
(Increase) decrease in prepaids and other assets |
|
(12,621 |
) |
809 |
| ||
|
Decrease in accounts payable and accrued expenses |
|
(15,126 |
) |
(12,787 |
) | ||
|
Decrease in payable to related party |
|
(3,054 |
) |
(4,891 |
) | ||
|
Increase in other liabilities |
|
2,758 |
|
1,086 |
| ||
|
Net cash provided by operating activities |
|
132,675 |
|
70,000 |
| ||
|
|
|
|
|
|
| ||
|
Investing Activities: |
|
|
|
|
| ||
|
Purchases of property and equipment |
|
(24,492 |
) |
(28,568 |
) | ||
|
Acquisition of customer portfolios and related assets |
|
(5,454 |
) |
(736 |
) | ||
|
Purchase of investments |
|
— |
|
(3,300 |
) | ||
|
Net cash used in investing activities |
|
(29,946 |
) |
(32,604 |
) | ||
|
|
|
|
|
|
| ||
|
Financing Activities: |
|
|
|
|
| ||
|
Proceeds from initial public offering, net of offering costs |
|
460,913 |
|
— |
| ||
|
Proceeds from follow-on offering, net of offering costs |
|
33,512 |
|
— |
| ||
|
Proceeds from issuance of long-term debt |
|
1,248,750 |
|
— |
| ||
|
Repayment of debt and capital lease obligations |
|
(1,780,400 |
) |
(9,009 |
) | ||
|
Payment of debt issuance costs |
|
(28,949 |
) |
(6,276 |
) | ||
|
Purchase of Class B units in Vantiv Holding from Fifth Third |
|
(33,512 |
) |
— |
| ||
|
Repurchase of Class A common stock (to satisfy tax withholding obligations) |
|
(14,045 |
) |
— |
| ||
|
Tax benefit from employee share-based compensation |
|
11,900 |
|
— |
| ||
|
Distribution to funds managed by Advent International Corporation |
|
(40,086 |
) |
— |
| ||
|
Distribution to non-controlling interests |
|
(22,538 |
) |
(2,792 |
) | ||
|
Net cash used in financing activities |
|
(164,455 |
) |
(18,077 |
) | ||
|
|
|
|
|
|
| ||
|
Net (decrease) increase in cash and cash equivalents |
|
(61,726 |
) |
19,319 |
| ||
|
Cash and cash equivalents — Beginning of period |
|
370,549 |
|
236,512 |
| ||
|
Cash and cash equivalents —End of period |
|
$ |
308,823 |
|
$ |
255,831 |
|
|
|
|
|
|
|
| ||
|
Cash Payments: |
|
|
|
|
| ||
|
Interest |
|
$ |
41,981 |
|
$ |
55,830 |
|
|
Taxes |
|
4,800 |
|
5,718 |
| ||
|
Noncash Items: |
|
|
|
|
| ||
|
Issuance of tax receivable agreements |
|
$ |
333,000 |
|
$ |
— |
|
|
Assets acquired under capital lease obligations |
|
— |
|
12,234 |
| ||
|
Accrual of secondary offering costs |
|
3,000 |
|
— |
| ||
Schedule 6
Vantiv, Inc.
Reconciliation of GAAP Net Income to Cash Net Income
(in thousands)
(Unaudited)
|
|
|
Three months ended June 30, 2012 |
| ||||||||||||||||
|
|
|
|
|
Transition, Acquisition |
|
Share-Based |
|
Comparability |
|
Other |
|
|
| ||||||
|
|
|
GAAP |
|
and Integration(1) |
|
Compensation |
|
Adjustments |
|
Adjustments |
|
Cash Net Income |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Revenue |
|
$ |
469,622 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
469,622 |
|
|
Network fees and other costs |
|
209,244 |
|
— |
|
— |
|
— |
|
— |
|
209,244 |
| ||||||
|
Net revenue |
|
260,378 |
|
— |
|
— |
|
— |
|
— |
|
260,378 |
| ||||||
|
Sales and marketing |
|
70,532 |
|
— |
|
— |
|
— |
|
— |
|
70,532 |
| ||||||
|
Other operating costs |
|
40,417 |
|
(1,347 |
) |
— |
|
— |
|
— |
|
39,070 |
| ||||||
|
General and administrative |
|
29,190 |
|
(633 |
) |
(8,829 |
) |
— |
|
— |
|
19,728 |
| ||||||
|
Depreciation and amortization |
|
39,667 |
|
— |
|
— |
|
— |
|
(29,286 |
)(2) |
10,381 |
| ||||||
|
Income from operations |
|
80,572 |
|
1,980 |
|
8,829 |
|
— |
|
29,286 |
|
120,667 |
| ||||||
|
Interest expense—net |
|
(10,169 |
) |
— |
|
— |
|
— |
|
— |
|
(10,169 |
) | ||||||
|
Non-operating expenses |
|
(836 |
) |
— |
|
— |
|
— |
|
836 |
(3) |
— |
| ||||||
|
Income before applicable income taxes |
|
69,567 |
|
1,980 |
|
8,829 |
|
— |
|
30,122 |
|
110,498 |
| ||||||
|
Income tax expense |
|
21,989 |
|
762 |
|
3,399 |
|
— |
|
16,392 |
(4) |
42,542 |
| ||||||
|
Net income(5) |
|
$ |
47,578 |
|
$ |
1,218 |
|
$ |
5,430 |
|
$ |
— |
|
$ |
13,730 |
|
$ |
67,956 |
|
|
|
|
Three months ended June 30, 2011 |
| ||||||||||||||||
|
|
|
|
|
Transition, Acquisition |
|
Share-Based |
|
Comparability |
|
Other |
|
|
| ||||||
|
|
|
GAAP |
|
and Integration(1) |
|
Compensation |
|
Adjustments |
|
Adjustments |
|
Cash Net Income |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Revenue |
|
$ |
402,564 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
402,564 |
|
|
Network fees and other costs |
|
185,694 |
|
— |
|
— |
|
— |
|
— |
|
185,694 |
| ||||||
|
Net revenue |
|
216,870 |
|
— |
|
— |
|
— |
|
— |
|
216,870 |
| ||||||
|
Sales and marketing |
|
59,570 |
|
— |
|
— |
|
— |
|
— |
|
59,570 |
| ||||||
|
Other operating costs |
|
34,980 |
|
(3,441 |
) |
— |
|
— |
|
— |
|
31,539 |
| ||||||
|
General and administrative |
|
28,224 |
|
(11,207 |
) |
(741 |
) |
— |
|
— |
|
16,276 |
| ||||||
|
Depreciation and amortization |
|
39,001 |
|
— |
|
— |
|
68 |
(6) |
(30,975 |
)(2) |
8,094 |
| ||||||
|
Income from operations |
|
55,095 |
|
14,648 |
|
741 |
|
(68 |
) |
30,975 |
|
101,391 |
| ||||||
|
Interest expense—net |
|
(28,952 |
) |
— |
|
— |
|
2,327 |
(7) |
— |
|
(26,625 |
) | ||||||
|
Non-operating expenses |
|
(13,799 |
) |
— |
|
— |
|
— |
|
13,799 |
(3) |
— |
| ||||||
|
Income before applicable income taxes |
|
12,344 |
|
14,648 |
|
741 |
|
2,259 |
|
44,774 |
|
74,766 |
| ||||||
|
Income tax expense |
|
683 |
|
5,640 |
|
285 |
|
870 |
|
21,306 |
(4) |
28,784 |
| ||||||
|
Net income(5) |
|
$ |
11,661 |
|
$ |
9,008 |
|
$ |
456 |
|
$ |
1,389 |
|
$ |
23,468 |
|
$ |
45,982 |
|
Non-GAAP Financial Measures
This schedule presents net revenue and cash net income. These are important financial performance measures for the company, but are not financial measures as defined by GAAP. Such financial measures should not be considered as alternatives to GAAP net income, and such measures may not be comparable to those reported by other companies.
(1) Represents costs associated with our separation from Fifth Third Bank and acquisition and integration costs in connection with our acquisitions in 2010.
(2) Represents amortization of intangible assets acquired in business combinations, primarily customer related intangible assets.
(3) Represents non-operating expenses primarily associated with the refinancing of our debt in 2012 and 2011.
(4) Represents adjustments to income tax expense assuming conversion of non-controlling interests into shares of Class A common stock.
(5) Net income assumes the conversion of non-controlling interests into shares of Class A common stock.
(6) Depreciation and amortization represents expense associated with our property and equipment, assuming that our property and equipment at December 31, 2011 was in place on January 1, 2011.
(7) Represents adjustment to reflect what our 2011 interest expense would have been if the Company’s level of debt and applicable terms as of December 31, 2011 was outstanding on January 1, 2011.
Schedule 7
Vantiv, Inc.
Reconciliation of GAAP Net Income to Cash Net Income
(in thousands)
(Unaudited)
|
|
|
Six months ended June 30, 2012 |
| ||||||||||||||||
|
|
|
|
|
Transition, Acquisition |
|
Share-Based |
|
Comparability |
|
Other |
|
|
| ||||||
|
|
|
GAAP |
|
and Integration(1) |
|
Compensation |
|
Adjustments |
|
Adjustments |
|
Cash Net Income |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Revenue |
|
$ |
902,411 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
902,411 |
|
|
Network fees and other costs |
|
409,452 |
|
— |
|
— |
|
— |
|
— |
|
409,452 |
| ||||||
|
Net revenue |
|
492,959 |
|
— |
|
— |
|
— |
|
— |
|
492,959 |
| ||||||
|
Sales and marketing |
|
143,289 |
|
— |
|
— |
|
— |
|
— |
|
143,289 |
| ||||||
|
Other operating costs |
|
79,426 |
|
(1,799 |
) |
— |
|
— |
|
— |
|
77,627 |
| ||||||
|
General and administrative |
|
57,787 |
|
(2,240 |
) |
(17,492 |
) |
— |
|
— |
|
38,055 |
| ||||||
|
Depreciation and amortization |
|
78,562 |
|
— |
|
— |
|
— |
|
(58,575 |
)(2) |
19,987 |
| ||||||
|
Income from operations |
|
133,895 |
|
4,039 |
|
17,492 |
|
— |
|
58,575 |
|
214,001 |
| ||||||
|
Interest expense—net |
|
(34,619 |
) |
— |
|
— |
|
— |
|
— |
|
(34,619 |
) | ||||||
|
Non-operating expenses |
|
(92,672 |
) |
— |
|
— |
|
— |
|
92,672 |
(3) |
— |
| ||||||
|
Income before applicable income taxes |
|
6,604 |
|
4,039 |
|
17,492 |
|
— |
|
151,247 |
|
179,382 |
| ||||||
|
Income tax expense |
|
1,954 |
|
1,555 |
|
6,734 |
|
— |
|
58,819 |
(4) |
69,062 |
| ||||||
|
Net income(5) |
|
$ |
4,650 |
|
$ |
2,484 |
|
$ |
10,758 |
|
$ |
— |
|
$ |
92,428 |
|
$ |
110,320 |
|
|
|
|
Six months ended June 30, 2011 |
| ||||||||||||||||
|
|
|
|
|
Transition, Acquisition |
|
Share-Based |
|
Comparability |
|
Other |
|
|
| ||||||
|
|
|
GAAP |
|
and Integration(1) |
|
Compensation |
|
Adjustments |
|
Adjustments |
|
Cash Net Income |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
Revenue |
|
$ |
774,010 |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
774,010 |
|
|
Network fees and other costs |
|
367,910 |
|
— |
|
— |
|
— |
|
— |
|
367,910 |
| ||||||
|
Net revenue |
|
406,100 |
|
— |
|
— |
|
— |
|
— |
|
406,100 |
| ||||||
|
Sales and marketing |
|
115,789 |
|
— |
|
— |
|
— |
|
— |
|
115,789 |
| ||||||
|
Other operating costs |
|
72,720 |
|
(9,681 |
) |
— |
|
— |
|
— |
|
63,039 |
| ||||||
|
General and administrative |
|
49,607 |
|
(17,948 |
) |
(1,393 |
) |
— |
|
— |
|
30,266 |
| ||||||
|
Depreciation and amortization |
|
75,701 |
|
— |
|
— |
|
2,665 |
(6) |
(62,179 |
)(2) |
16,187 |
| ||||||
|
Income from operations |
|
92,283 |
|
27,629 |
|
1,393 |
|
(2,665 |
) |
62,179 |
|
180,819 |
| ||||||
|
Interest expense—net |
|
(59,573 |
) |
— |
|
— |
|
6,323 |
(7) |
— |
|
(53,250 |
) | ||||||
|
Non-operating expenses |
|
(13,799 |
) |
— |
|
— |
|
— |
|
13,799 |
(3) |
— |
| ||||||
|
Income before applicable income taxes |
|
18,911 |
|
27,629 |
|
1,393 |
|
3,658 |
|
75,978 |
|
127,569 |
| ||||||
|
Income tax expense |
|
2,551 |
|
10,638 |
|
536 |
|
1,409 |
|
33,980 |
(4) |
49,114 |
| ||||||
|
Net income(5) |
|
$ |
16,360 |
|
$ |
16,991 |
|
$ |
857 |
|
$ |
2,249 |
|
$ |
41,998 |
|
$ |
78,455 |
|
Non-GAAP Financial Measures
This schedule presents net revenue and cash net income. These are important financial performance measures for the company, but are not financial measures as defined by GAAP. Such financial measures should not be considered as alternatives to GAAP net income, and such measures may not be comparable to those reported by other companies.
(1) Represents costs associated with our separation from Fifth Third Bank and acquisition and integration costs in connection with our acquisitions in 2010.
(2) Represents amortization of intangible assets acquired in business combinations, primarily customer related intangible assets.
(3) Represents non-operating expenses primarily associated with the refinancing of our debt in 2012 and 2011 and the termination of our interest rate swaps in 2012.
(4) Represents adjustments to income tax expense assuming conversion of non-controlling interests into shares of Class A common stock.
(5) Net income assumes the conversion of non-controlling interests into shares of Class A common stock.
(6) Depreciation and amortization represents expense associated with our property and equipment, assuming that our property and equipment at December 31, 2011 was in place on January 1, 2011.
(7) Represents adjustment to reflect what our 2011 interest expense would have been if the Company’s level of debt and applicable terms as of December 31, 2011 was outstanding on January 1, 2011.
Schedule 8
Vantiv, Inc.
Reconciliation of GAAP Income from Operations to Adjusted EBITDA
(in thousands)
(Unaudited)
|
|
|
Three months ended |
|
|
|
Six months ended |
|
|
| ||||||||
|
|
|
June 30, |
|
June 30, |
|
|
|
June 30, |
|
June 30, |
|
|
| ||||
|
|
|
2012 |
|
2011 |
|
% Change |
|
2012 |
|
2011 |
|
% Change |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
Income from operations |
|
$ |
80,572 |
|
$ |
55,095 |
|
46 |
% |
$ |
133,895 |
|
$ |
92,283 |
|
45 |
% |
|
Depreciation and amortization |
|
39,667 |
|
39,001 |
|
2 |
% |
78,562 |
|
75,701 |
|
4 |
% | ||||
|
EBITDA |
|
120,239 |
|
94,096 |
|
28 |
% |
212,457 |
|
167,984 |
|
26 |
% | ||||
|
Transition, acquisition and integration costs(1) |
|
1,980 |
|
14,648 |
|
-86 |
% |
4,039 |
|
27,629 |
|
-85 |
% | ||||
|
Share-based compensation |
|
8,829 |
|
741 |
|
NM |
|
17,492 |
|
1,393 |
|
NM |
| ||||
|
Adjusted EBITDA |
|
$ |
131,048 |
|
$ |
109,485 |
|
20 |
% |
$ |
233,988 |
|
$ |
197,006 |
|
19 |
% |
Non-GAAP Financial Measures
This schedule presents EBITDA and adjusted EBITDA. These are important financial performance measures for the company, but are not financial measures as defined by GAAP.
These financial measures should not be considered as an alternative to GAAP income from operations, and may not be comparable to those reported by other companies.
(1) Represents costs associated with our separation from Fifth Third Bank and acquisition and integration costs in connection with our acquisitions in 2010.